KEY LEVELS TO WATCH:
DOW   Support 12500 Resistence 13000
S&P 500 Support 1400 Resistence 1500
NASDAQ COMP. Support 2320 Resistence 2530
RUSSELL
US $ Index 81.00
MARKET OVERVIEW:
INDICES:
ECONOMIC PICTURE:
It looks like the markets are deciding to rally. The move upward is not as strong as is suggested by the Dow and the financial press in general.  The internals have been strong this week, with advances leading declines on a nearly 2:1 ratio, and new highs over new lows by a healthy 20:1 margin on the big board.  In addition to monitoring the markets health in the coming weeks, we have to keep an eye on volume as well as the greater market.  For example, the Dow and S&P 500 were both up, but the Russell 2000 was not.  Suggesting the move higher may be concentrated in larger cap sectors.  The Russell 2K has still been performing well, a surprise to some, and evidence that small caps are also participating in this rally, as many market analysts expected less than par performance out of them.
Esitmates suggest first quarter GDP near 1.5% - weakest gains in four years. Consumer spending appears to be a key element with concern to the economic outlook, due to the low unemployment rate and strong income growth. The trade imbalance between net imports and exports creating a drag on the strong fourth quarter energy boosts.
STOCKS AND INDUSTRIES TO WATCH:
Three key factors to watch are:
China
Energy
Metals

China- The market is watching China's growth rate, as a competition for resources will drive inflation.  China's growth rate is gaining more weight than the United States rate of economic cooling.  Since it has to do with economies of scale -  that is the fact that China's population (at 1.3b people) is considerably larger than that of the United States (298.4m people) - a smaller increase in the standard of living in a larger population, results in greater consumption relative to smaller popluations.  And the rate of growth in the Asian region, is fueling a hot need for materials, both for production, and for ultimate consumer demand.  What this means, is that the demand for materials, and the prices charged for goods produced in the region, along with currency fluctuations, could push inflation higher and have a cooling effect, faster than if the U.S. economy were to naturally move through a typical downturn in the business cycle.

Energy - The importance of energy is no secret.  One thing not in the forefront of the attention, is the present fear by cities of agining/unreliable electrial transmission systems. This a big consideration for larger cities in terms of keeping and attracting business.  If power cannot be adequately delivered to a commercial entity, how can they excel at their operations? It would be beneficial to look for solution providers in this market.

Metals - Zinc stocks have been hot. PCU, FCX, RIO, BHP, AAUK, all have done well.

Two industries showing strength are the metals and mining (specifically gold and silver), and the drugs (wholsale suppliers). 

Nanotechnology

Futurists - (studying where technology/business will flourish next. Dr. Richard Florida)
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